Moving Abroad? Your Tax Residence Status May Become a Key Issue Under the New Exit Tax Rules

When relocating abroad, most people focus on practical matters such as housing, schooling or health insurance. However, for individuals with substantial investment portfolios or business assets, a new consideration may become increasingly important from 2027 onwards:

What happens if they cease to be Hungarian tax residents?

Will they have to pay an exit tax?

According to a legislative proposal submitted on 27 October 2026, certain individuals moving abroad may become subject to an exit tax. The proposal would not tax the relocation itself. Instead, it would examine whether Hungarian tax residency ceases, the amount of wealth held by the individual, and 

whether Hungary loses its right to tax future income generated from the relevant assets.

The essence of the exit tax is that, under certain conditions, Hungary could tax unrealised gains accumulated on specific assets already at the moment Hungarian tax residency ends. A further condition is that the individual must have been a Hungarian tax resident for at least five of the ten tax years preceding the change of residence.

The rules would apply only to more substantial holdings. The combined fair market value of the affected assets must exceed HUF 500 million, or the individual must hold at least a 20% participation worth a minimum of HUF 250 million. Relevant assets may include securities, corporate shareholdings, crypto-assets, holdings in TBSZ or NYESZ accounts, and certain rights connected to insurance products. Cash, bank account balances and bank deposits would be excluded.

One of the most notable features of the proposal is that the affected assets would be deemed to have been disposed of at fair market value on the day before Hungarian tax residency ceases. As a result, a tax liability could arise even if no actual sale takes place.

Importantly, exit tax would only apply if, as a consequence of the change in residence, Hungary loses or can exercise only limited taxing rights over future income from the disposal of the asset concerned. If Hungary's taxing rights remain unchanged, no exit tax would arise.

The destination country would primarily affect whether payment of the tax can be deferred, 

rather than whether exit tax applies at all.

For relocations to an EU or EEA Member State, the proposal would provide for an automatic, interest-free payment deferral, provided certain reporting and compliance obligations are met. By contrast, no such automatic deferral would be available when moving to a non-EU and non-EEA country, such as Switzerland or the United Kingdom.

Moving Abroad? Pay Attention to Your Tax Residence Status and the New Exit Tax Rules